UPDATE 2-Colombia's president replaces finance minister

August 23, 2012|Reuters

By Jack Kimball and Helen Murphy

BOGOTA, Aug 23 (Reuters) - Colombian President Juan ManuelSantos announced on Thursday he replaced his finance minister,in a move that surprised financial markets, and named currentEnergy Minister Mauricio Cardenas to take over running LatinAmerica's fourth-largest economy.

At the midpoint of his four-year term, Santos late onWednesday asked all 16 ministers to resign, including FinanceMinister Juan Carlos Echeverry, setting the stage for a cabinetshuffle aimed at shoring up his slumping approval ratings.

It was not immediately known when Cardenas, who holds adoctorate in economics from the University of California atBerkeley, would take on his new role.

Santos, after naming Cardenas, said he was "designed forfinance minister." Cardenas previously held ministerial posts ineconomic development and transport.

Among other posts that also may be changed in the comingdays are education, health, interior, agriculture and defense,according to government sources.

"Cardenas is an extremely well known and respectedeconomist, with fiscally sound ideas, so from a marketperspective this will be well received," said Alberto Bernal,head of research for Bulltick Capital Markets in Miami.

"What's more important now for the market is the politicalmakeup for the entire Santos cabinet."

Santos did not say who would be the next minister of minesand energy. Echeverry will be nominated for a top role in theInternational Monetary Fund, Santos said.

The 61-year-old Santos has been under pressure from aconstant stream of criticism from former President Alvaro Uribeand a growing number of attacks by leftist rebels, denting hisonce commanding popularity.

Some analysts said Defense Minister Juan Carlos Pinzon couldbe on the list of those leaving after a rise in guerrillaassaults, coupled with the perception that security was gettingworse.

Santos, credited with some of the biggest blows to therebels, accuses foes of using attacks by rebels as a "politicalweapon" and dismisses claims by Uribe and his followers that heis failing on security.

Once an investment pariah as drug-trafficking insurgentskidnapped, killed and attacked rural areas with bombs, Colombiahas seen a dramatic turnaround in the last decade, attractingrecord foreign investment.